Maritime Surveillance

Lord Beamish Excerpts

Thursday 7th February 2013 Westminster Hall

[Thomas Docherty]

It feels like yesterday, I am sure, to many in the MOD. I had the pleasure of serving with the Minister in the Armed Forces Bill Committee when he was merely an Under-Secretary, and I thank him for the letter that he kindly sent me this morning on another matter; I am most grateful that we could resolve the issue. Obviously, he is not directly responsible for many of the decisions, or the comments made by the MOD on the report; but of course he believes in collective responsibility, and I am sure that he will be happy to respond in relation to his predecessor’s comments and to our observations. I have a huge amount of time for the Minister’s predecessor, who was very able and sound, which is probably why the Deputy Prime Minister got rid of him in the Liberal Democrat reshuffle.

Without a doubt, as we said on the acquisition report earlier this week, many decisions in the lead-up to the SDSR were rushed and not fully thought through. Thinking was not done for the long term. With a little charity towards the Government, I must say that the programme is probably the finest example of how not to procure. Four parties each bear some responsibility. First, I hope that my hon. Friend the Member for North Durham (Mr Jones), who played no part in the decision when he was at the Ministry of Defence, will accept that my right hon. Friend the Member for Coventry North East (Mr Ainsworth) and other colleagues over the years perhaps did not provide enough scrutiny of the acquisition process.

[Mr Kevan Jones (North Durham) (Lab)]

My hon. Friend must remember that the contract was procured under the previous Conservative Government. If I remember rightly, when I was on the Select Committee, we produced a report suggesting that it should have been cancelled back in the early 2000s. I think that I moved the amendment.

[Thomas Docherty]

As I said, I know that my hon. Friend played no part in the decision to proceed. I cannot quite remember who was the Minister responsible for acquisition in the previous Conservative Government, but perhaps it will come back to me later in the debate.

Not just Ministers need to take some responsibility for mistakes; Ministry of Defence officials and the Royal Air Force need to take some, too. There was an 86% change in the aircraft specification from the time of commissioning under that previous Minister and October 2010. Mr Brady, you worked in industry prior to coming to the House. You know that making that amount of change to a project means that costs will go up and it will be delayed.

--- Later in debate ---

[Thomas Docherty]

I am very conscious that the title of this debate is “Maritime Surveillance” rather than “Acquisition”; I suspect that we may well seek a broader debate on acquisition. Let me just say to the Minister—again, I thank him for his career-helpful advice and praise—that maritime surveillance, as the Committee has so clearly identified, is not a “like” or a “nice to have”. It is absolutely essential.

[Mr Kevan Jones]

I am intrigued by the Minister’s intervention on my hon. Friend. Is that not exactly what the Government did when they came into power in May 2010? They added up every piece of equipment in the future equipment programme, which covered 10 years and not one year, and somehow assumed that that is where we get to the figure of the black hole.

[Thomas Docherty]

That is entirely what happened. Let us just remind ourselves that the so-called black hole is a single line from a National Audit Office report from before the 2010 general election that said—

[Mr Jones]

It was in 2009.

[Thomas Docherty]

Indeed. I am most grateful to my hon. Friend. It said that if there was no increase in defence equipment spending during the next decade and all the current programmes went ahead, that would create a £38 billion black hole.

[Mr Jones]

I am sorry, but it did not actually say that. It said £36 billion. I do not know where the extra £2 billion came from.

[Thomas Docherty]

Well, I cannot possibly comment on the sums. However, that principle of not committing to a future increase in spending is exactly what this Government have done. We saw it again yesterday at Prime Minister’s questions, when the Prime Minister, in response to what was not the most difficult question from the right hon. Member for North East Hampshire, the Chairman of the Defence Committee—

--- Later in debate ---

[Mr Kevan Jones (North Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Brady.

I congratulate the Defence Committee on producing the report. I agree with the comments about the Committee. I was a member for seven and a half years, and it is a consensual Committee that does a lot of good work on a cross-party basis. I concur with the remarks about the Committee’s current Chairman, although I remember that, when I left the Committee to become a Minister, he said that my leaving was a bit like toothache—missed when it is gone.

The report covers an important issue that many Members have talked about today. As the Chairman and others have argued, the threats are wide. We are a maritime nation, and we depend on open sea lanes for trade and security. As a former Defence Minister, I am aware of the threats to our independent nuclear deterrent. The idea that, somehow, the end of the cold war means that Russia has gone away is incorrect. A maritime surveillance capability is vital to our defence needs, and not only because of the issues outlined by the Chairman of the Select Committee.

[Sandra Osborne]

What is my hon. Friend’s attitude to Lord Browne’s comments? Does he think we can afford a like-for-like replacement for Trident, or should we consider another system?

[Mr Jones]

I have read Lord Browne’s articles with great interest. I consider him a friend, but the weakness of his argument in The Daily Telegraph is that he makes a point about alternatives without giving one.

A maritime surveillance capability, as the hon. Member for Beckenham (Bob Stewart) said, is vital to ensuring that we know the location of threats to our independent nuclear deterrent. From personal experience, I know the importance that the Ministry of Defence places on ensuring that any threats to our independent nuclear deterrent and our nation are taken very seriously.

Having read the report, I do not think there is disagreement between the Committee and the Government. Uniquely, there is agreement between the Government, the Committee and the National Audit Office that the decision in the 2010 strategic defence and security review was wrong. In a minute I will address why I think the decision was taken, because the contribution from the hon. Member for Aldershot (Sir Gerald Howarth) is enlightening.

Yes, mistakes were made in the discussions on Nimrod. I am surprised that the hon. Gentleman criticised BAE Systems because, as he said, he is referred to in many parlours as the “Member for BAE Systems.” On this occasion, he has been frank and clear in his criticism of the company.

The mistakes made in the early days were like trying to turn a 1962 Mini Cooper into today’s model with the same frame. That was highlighted by the reports on the project from when I was a member of the Defence Committee. Was there a time to pull out of the contract? Yes, I think there was. Our report from the early 2000s suggested that there should have been that option. When spending public money, we get to a point where people think, “A little bit more might get this done.” In hindsight, had there been some revision of the project in the early 2000s, Conservative Members would rightly have thrown criticism at us for wasting large amounts of public money. Making the decision earlier might have led to a capability being in place today.

There is no disagreement that there is a capability gap. The report states:

“The National Audit Office’s (NAO) Ministry of Defence Major Projects Report 2011 considered the capability gaps left by the…MRA4 decision. The NAO Report said that according to the MoD, the Nimrod contributed to eight out of the 15…priority risks set out in the National Security Strategy. It added that the Nimrod was uniquely able to rapidly search large maritime areas, a capability relevant to long range search and rescue, maritime counter-terrorism, gathering strategic intelligence and protecting the nuclear deterrent. The NAO Report further said that the MoD had carried out studies in the lead up to the SDSR to assess the capability gap from cancelling the Nimrod MRA4 and the MoD ‘assessed that cancelling Nimrod would have consequences for the military tasks that the aircraft was expected to undertake, some of them severe’. The Report also outlined the capability gaps”.

[Mr Robathan]

I was not involved in defence before the general election, but I understand that the MR2 was retired from service in March 2010, when the hon. Gentleman was a Minister. That is when the capability gap started, because there was no maritime reconnaissance aircraft from that day forwards. Is that correct?

[Mr Jones]

The important point is that the earlier decision on the MRA4 should have been reviewed. We would then have avoided the capability gap.

I remember that at the time we were facing an Opposition who were calling not only for larger armies, more ships and more aircraft, but for an increased defence budget. I am sure that if we had decided to cancel some of the things that they have subsequently cancelled, they and their allies at the time on The Sun would have given us a harder ride than they have had in recent years.

The NAO report sets out that

“limited analysis was carried out on how specific military tasks could be covered”

by a combination of the various options. The report continues:

“However, the Department noted that there would be ‘significant shortfalls without significant investment, and the co-ordination of such assets at the right place and the right time’”.

There is no disagreement that the Government have created that major capability gap. Worse, there is no solution to fill that gap. I agree with the hon. Member for Aldershot that we are relying heavily on our allies. I pay tribute not only to the Norwegians but to the US and others that are helping us with that capability.

The next question is why was the decision taken? Again, I am interesting in what the hon. Gentleman said: the decision had to be taken because of the mythical £38 billion black hole. I notice Ministers sometimes use that figure, but sometimes they do not. We must recognise that those decisions had to be taken because of the 9% cut in the defence budget introduced by the SDSR. The decisions were not strategic; they were budgetary. Knowing the defence budget as I do, there are only two simple ways to take out in-year cash. The first is to take out capability, as happened here, and, for example, with the Harriers. The second is to sack people, which has happened over the past few years.

I have never figured out where the £38 billion figure came from, even though my parliamentary colleagues, the Public Accounts Committee, the Defence Committee and I have asked for explanations. We have been promised explanations that we have never received. I suspect the figure came from the 2009 NAO report, but that was on the equipment budget.

As my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) said, it gets to £36 billion only if everything in the programme is included, flat cash, for 10 years. Adding the inflation rise meant £6 billion. As the hon. Member for Aldershot knows, as he has admitted this afternoon, there might be aspirations in the equipment programme, but that does not mean it will all be delivered. Some things come out and others go in.

The weakness of the current situation is that the Secretary of State claims to have balanced the budget but, so far as I can see, that refers only to the equipment budget, rather than the remaining 55%. If he has been so good at plugging a £38 billion black hole within months, he and his predecessor, who made the same claim, should not be in the Ministry of Defence, but in the Treasury. We need some honesty.

[Sir Gerald Howarth]

The hon. Gentleman is being slightly unfair. When I entered the Department, I said to the then Secretary of State that the first thing we had to do was regain the confidence of the Treasury. When the hon. Gentleman and his colleagues left, the Treasury had no confidence in the Ministry of Defence. By the time the current Secretary of State made a statement last July, the Chief Secretary to the Treasury was sitting next to him on the Front Bench, indicating that we had reached an accommodation with the Treasury. It is vital that the Ministry of Defence has that accommodation with the paymaster. The hon. Gentleman may not like, I may not like it, but it is a fact of life in this country.

[Mr Jones]

I am not surprised at that. I have dealt with the Treasury myself when in the Ministry of Defence. The current Secretary of State is doing the Treasury’s bidding, no doubt. What I am about to say might sound strange: at least the right hon. Member for North Somerset (Dr Fox), the former Secretary of State, actually argued for defence and got into disagreements. To be fair to him, he tried his best on that decision. The whole problem with the SDSR was that it put the Treasury in the driving seat. My experience of dealing with Treasury officials about our budget when I was a Minister was that they had limited knowledge and understanding of how defence works in practice. That is one of the weaknesses: letting the lion into the room, with very little understanding of how defence works.

[Thomas Docherty]

On the point of being Treasury-driven, we mentioned the deterrent several times. Is my hon. Friend as surprised as me that, in a written answer to me last year, the Treasury stated that, although leading the review of the deterrent, its representatives had not once set foot in the MOD building, and that not one single admiral or air marshal had gone across to the Cabinet Office to see them?

[Mr Jones]

That does not surprise me at all. If we had more time, I could bore Members with some of the ludicrous ideas that were presented to me when I was a Minister by the Treasury, showing a lack of understanding.

The Ministry of Defence claims to have balanced the budget, even though we do not know what is on the whiteboard. The Minister said again this afternoon that he is not prepared to tell us what is on the whiteboard. Is the replacement on there, yes or no? Is, for example, Sentinel, another very important piece of kit, on the whiteboard? Even though it has been deployed to Mali, the Secretary of State indicated in Defence questions the other day that it will somehow be reprieved. If so, what is coming off the budget? Last week’s NAO report said that the £8 billion put aside in reserve may not be enough even to cover the risk in the existing programme. The hon. Member for Mid Worcestershire (Peter Luff) keeps asking at Defence questions for that whiteboard. Until we get to see that and what is actually in the equipment budget, there is no way of telling when the capability will be put forward.

When the hon. Member for North Devon (Sir Nick Harvey) came before the Committee, he was clear that there was no money or indication to replace this capability until 2015. There are unanswered questions. There is clearly a capability gap; the Government admit that. The Committee and the NAO report identified that. No solution has been put forward to resolve that.

[Mr Arbuthnot]

Would the shadow Minister tell us whether the Leader of the Opposition is committed to increasing defence spending year-on-year in real terms after 2015?

[Mr Jones]

I am surprised by the right hon. Gentleman. He is usually non-partisan in such matters. If we do not know what is on the whiteboard, what the budget is or the state of the remaining 55% of the budget, it is difficult to make that determination. The Government made claims last week when they got the figures mixed up and did not understand that the 1% applies only to the equipment budget, not the remaining 55%. Even the NAO report says that that might be swallowed up just by the risk in the existing programme. We need to know such things. Until we do, it is difficult to know what will be capable of replacing this piece of kit.

It has been a good debate, which shows the cross-party nature of the Defence Committee at its best. However, the Government, with the short-sighted decisions they took in the SDSR, among many others, have created a huge capability gap that I fear will have strategic implications for the nation for many years.

[The Minister for the Armed Forces (Mr Andrew Robathan)]

It is a pleasure to serve under your chairmanship, Mr Brady. Of course, the Conservative parliamentary party always serves under your chairmanship.

I begin by congratulating my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on the work he and his Committee have done in this area. Since we are all being nice to those who help us, I add my thanks to the huge number of serving personnel and civil servants who came to fill in one or two knowledge gaps in my portfolio. I have already made that point. They have come along to see whether they have repaired the gaps in my knowledge, and I think they did.

This is an important and wide-ranging subject and it is right to give it serious attention. As has already been pointed out, maritime security is vital to the defence of our nation and our interests around the world. The military and non-military dimensions of maritime surveillance are key elements. We highlighted our position as an open, outward-facing island nation in the national security strategy and placed an emphasis on surveillance and intelligence in the SDSR. Put simply, we cannot protect ourselves against existing and anticipated threats if we do not understand and cannot detect them. Doing so successfully requires a range of capable platforms and sensors, highly trained personnel and procedures to ensure effective action is taken on the information they provide.

The geography of the United Kingdom means that we are dependent on the sea for our economic prosperity. Maritime security and surveillance underpins our trade: the vast majority of our imports and exports are transported by sea. As much as 90% of world trade is carried by sea, so we not only need to secure our own territorial waters but to contribute to protecting key global sea lanes and our vital interests overseas.

I think everybody here would agree that we also wish to be able to project military power with our allies through the use of expeditionary forces. We rely again on maritime surveillance assets to protect those forces wherever they are deployed. Closer to home, the Government have responsibility to protect our people, our borders and our exclusive economic zone. I have always said that the first duty of Government is the defence of the realm. That requires that the different agencies charged with doing so—the police, borders, immigration, intelligence agencies, coastguard, Department for Transport, search and rescue providers and the armed forces—have the capabilities they need and work closely together.

None the less, hon. Members will be well aware that we did not start on firm financial ground in planning for the future. The parlous state of the defence budget inherited from the previous Government and the overheated and unrealistic equipment plan meant that hard decisions had to be taken. I am not going to engage again with the hon. Member for North Durham (Mr Jones), who is in denial, yet he was a Minister in the previous Government and knew what the situation was. He remains in denial and we have had this conversation before.

I understand that the Secretary of State has written to the shadow Secretary of State detailing exactly what the situation was.

[Mr Kevan Jones]

No.

[Mr Robathan]

If he has not, I will come back to the hon. Gentleman and ensure he gets a response. It is also the case that the parlous state of the nation’s finances is visible for all to see. Yet, instead of having any guilt about it, he sits and smiles and says it is not true and that everything was going swimmingly, as the previous Government in a profligate manner distributed money everywhere and left us in this ghastly situation that none of us enjoys.

[Mr Kevan Jones]

Will the Minister give way?

[Mr Robathan]

I have told the hon. Gentleman that I will not engage with him again, because we have done it before and he is in denial. One cannot have military or economic security based on unsustainable defence spending. The Soviet Union found that out. That is why we took a number of difficult decisions during the SDSR, including the decision not to bring the Nimrod MRA4 into service.

At the beginning of the debate, my right hon. Friend the Member for North East Hampshire said that he did not wish to concentrate on Nimrod, but I am afraid that it has been largely about Nimrod, which I will therefore have to deal with in some detail. I asked the officials present—this huge number of serving personnel and civil servants—at what date the original Nimrod decision was taken, so I knew before his confession that it was, sadly, taken under the previous Conservative Government.

We should not forget the background to the decision to cancel Nimrod. There were no maritime reconnaissance aircraft flying in the RAF when we came into government. We did not create the capability gap—the capability did not exist. Owing to cost growth in the programme, the original plan to convert 21 airframes for the MRA4 had by 2010 been scaled back to only nine. The in-service date had been delayed from 2003 to 2012, costs had none the less risen from £2.8 billion to £3.6 billion, there were still outstanding technical problems which would have taken further large sums of money to solve and we knew that it would cost about £2 billion to operate over the next decade. While the capability’s role in support of anti-submarine and anti-surface warfare, strategic intelligence gathering, and search and rescue remained important, in a financially constrained environment dominated by the operations in Afghanistan among other threats, it made the most military and financial sense to discontinue the programme, however unhappy that made us.

I was particularly interested in the comments of the hon. Member for Dunfermline and West Fife. I joined the armed forces in 1970 and, during my time in the Army and in Parliament since, I have seen a long list of poor procurement projects—[Interruption.] That is the Leader of the Opposition ringing. Out of a litany of procurement disasters, as the hon. Gentleman said, this has been one of the worst. It was more than nine years late, each aircraft was to cost three times the original amount and we still had not finished. We did not where the programme was going, there was no end in sight and we were not asked to throw good money after bad. I am afraid that that decision, much as it is regretted, was the right one.